Wealth-tax exemption prevails over special trust assessment provisions where no express override removes the statutory threshold.

Section 21(4) of the Wealth-tax Act, 1957 was treated as a special assessment provision for trust assets held for indeterminate or unknown beneficiaries, but it did not operate as an independent charging section. The charging provision in section 3 remained subject to the Act as a whole, and the Schedule exemption for an individual's net wealth not exceeding Rs. 1 lakh continued to apply. The higher rate under section 21(4) could not override that statutory exemption unless the provision expressly displaced it. On that construction, wealth-tax was not leviable on the private discretionary trust where its net wealth was below the exemption limit.

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Issues: Whether section 21(4) of the Wealth-tax Act, 1957 authorised levy of wealth-tax on a private discretionary trust even when the taxable net wealth was below the Rs. 1 lakh exemption limit available under the Schedule.

Analysis: Section 3 is the charging provision and is subject to the other provisions of the Act, while section 21(4) falls within the special assessment machinery for assets held for indeterminate or unknown beneficiaries. The Schedule, as it stood for the relevant assessment year, expressly provided that no wealth-tax was payable where an individual's net wealth did not exceed Rs. 1 lakh. The higher rate under section 21(4) could operate only where wealth-tax was otherwise chargeable; it did not convert that provision into an independent charging section or override the exemption embedded in the Schedule.

Conclusion: Section 21(4) did not authorise levy of wealth-tax on the assessee trust where its net wealth was below Rs. 1 lakh, and the answer to the referred question was in the negative, in favour of the assessee.

Ratio Decidendi: A special assessment provision prescribing the rate or mode of levy cannot override a statutory exemption under the charging scheme unless it expressly takes away that exemption.

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